Our Top Reports For Today
- (00:00) Stories Of The Day
- (01:00) Indian markets find a footing, lead a global recovery.
- (02:42) Goldman, Morgan Stanley, UBS cut crude price forecast for 2024, peg it at around $77 a barrel.
- (04:11) Fuel prices are coming down, for planes, not cars, as Indigo to drop fares.
- (15:11) Bajaj Chetak’s half a century journey from petrol through electric
- (16:27) The Magnificent Seven: From Sizzle To Fizzle?
- (19:04) Microsoft makes first change to keyboard in 30 years with AI key
NOTE: This transcript contains only the host's monologue and does not include any interviews or discussions that might be within the podcast. Please refer to the episode audio if you wish to quote the people interviewed. Email [email protected] for any queries.
Markets Find A Footing
After two days of declines, the stock markets recovered almost inexplicably.
Though it depends on how you see the sequence, Indian markets recovered first and then the global markets recovered later overnight, presumably on the same triggers that everyone was searching for.
The BSE Sensex soared 491 points to end at 71,848 levels while the Nifty50 ended 141 points higher at 21,659 levels.
The Nifty Realty index jumped 6.76 per cent and I will come to that in some detail shortly.
Elsewhere in the world, both stocks and bonds steadied after a rocky start to the year leading many to speculate if the rest of 2024 would be similar.
That sentiment has abated, at least for now, or right now.
Investors are now focussed on US jobs data on Friday which could provide more clues on the timing of possible interest-rate cuts this year. On Wednesday, minutes from the Fed’s December meeting suggested rates could remain at restrictive levels “for some time.”
So it’s back to near term crystal ball gazing, essentially.
And back home, people are, as we discussed earlier, keeping an eye out on earnings which will start flowing next week.
The IT companies will be off first and it is possible that some of them want to be that student in the class who wants to be the last to answer the teacher’s question.
Speaking of IT, the tech giants in the US are losing ground in the stock markets as the AI linked and led boom appears to be losing steam. The chip index has now declined almost 7% since reaching a record high close on Dec. 27. More on that shortly.
And now our energy segment supported by IndiaEnergyWeek
Global Investment Banks Cut Oil Price Forecasts
Speaking of declines, major investment banks led by Morgan Stanley are cutting forecasts for Brent crude prices this year by about 9% to around $77 a barrel on Wednesday.
The expectation is that the sheer force of supply, led by US shale production will take care of growth and the production cuts will be enforced soon by the OPEC countries.
Moreover, oil demand in itself is, as we have discussed here, expected to slow down this year as a post-pandemic rebound loses steam.
The specific figure per barrel of oil is not so relevant as is the fact that demand is slowing down.
A lower price outlook is obviously good for countries like India as we shall see shortly.
Brent futures traded near $79 a barrel on Thursday.
According to Bloomberg, among the five big Wall Street banks, only Bank of America Corp. now anticipates significant gains this year, forecasting an average of $90 a barrel.
Citigroup Inc. remains the most bearish, predicting an average of about $75 a barrel.
It's Getting Cheaper To Fly Than To Drive
Speaking about lower oil price outlook, a litre of petrol in a pump is the same but a litre of jet fuel is cheaper so airlines like Indigo are dropping fares.
IndiGo, on Thursday, said that it would be removing fuel charges from all domestic and international flights following a reduction in Aviation Turbine Fuel (ATF) prices. This applies to tickets booked from January 4 onwards.
ATF costs represent the largest expenditure for Indian carriers, consuming about 45 per cent of their overall revenue.
Indigo had introduced a surcharge in October 2023 following an increase in ATF prices. It was the fourth consecutive ATF price hike, a 5.14 per cent increase over the previous month and a 2.32 per cent year-on-year hike.
IndiGo had imposed a fuel charge of Rs 300 for flights covering up to 500 km and Rs 400 for those between 501 and 1,000 km and those covering distances of 3,501 km and above incurring a fuel charge of Rs 1,000.
Since November, however, ATF prices have been falling steadily.
Indigo said that since ATF prices are dynamic, they would continue to adjust fares and components thereof, to respond to any change in prices or market conditions. IndiGo remains committed to its promise of providing affordable, on-time, courteous, and hassle-free travel for our customers," said the airline.
The Energy Segment was supported by IndiaEnergyWeek which kicked off on February 6. For more details, visit IndiaEnergyWeek.com.
Realty Stocks Are On The Roll
Stocks of real estate companies are shooting up with the Nifty Realty Index going up nearly 6 percent to a fresh all-time high of 834.45.
The gains were led by Sobha Developers which zoomed 20 percent to a new record high.
Shares of Lodha, listed as Macrotech Developers, jumped over 8 percent and several other realty company stocks from Godrej Properties to DLF to Oberoi Realty rose after the companies either announced fresh projects, ambitious sales projections from them or a path to achieving all of them with fresh management blood.
The exuberance in realty stocks obviously reflects a larger bullishness in real estate.
India’s top 8 property markets registered a 5% growth in annual sales at over 3.29 lakh apartments in 2023, showed data from Knight Frank India with cities like Ahmedabad and Pune growing at 15 and 13%.
Mumbai region registered the highest sales of 86,871 units demonstrating a 2% growth, while Kolkata witnessed the highest home sales growth, in terms of percentage, at 16% followed by Ahmedabad at 15% while Pune grew at 13%.
But prices have grown faster.
Hyderabad jumped 11% in 2023 while Mumbai, Bengaluru, and Kolkata were up 7% each.
Importantly, people are buying, as The Core Report has focussed on earlier, more expensive properties, outpacing affordable ones.
The demand surge is setting off more supply at this point.
To understand the overall prognosis for the real estate market and also the key question of whether we are entering a bubble like zone, I spoke with Gulam Zia, Senior ED at Knight Frank overseeing research and valuation, among other areas.
I began by asking him what he was projecting for 2024?
A Scooter Ride Spanning Half A Century
Speaking of stocks and some old ones, Bajaj Auto is launching a new version of the Bajaj Chetak electric scooter today.
Remember the Chetak brand was for all practical purposes given a burial after Rajeev Bajaj decided to focus on motorbikes around 2005 as opposed to scooters, pretty much against founder and father late Rahul Bajaj’s wishes.
He told me so in an interview in case you are wondering how I say this with so much confidence.
Of course, the reference then was to the sputtering 2-stroke engine scooters and electricity was nowhere on the horizon.
Before I come to the electric, the original Chetak was launched more than half a century ago by Rahul Bajaj who ran the company from 1965 actively till 2005, around the time Chetak in its petrol avatar was phased out to make way for motorcycles.
The new Chetak, in the context of all that I just said, will apparently have a revamped yet retro design.
The Economic Times reports that the 2024 Bajaj Chetak will feature several upgrades including more range, a different battery, higher speed and more storage plus more electronics.
From Sizzle To Fizzle
The tech giants have got off to a weak start in the stock markets this year and week.
The Magnificent Seven, which includes Apple Inc., Amazon.com Inc., Alphabet Inc., Microsoft Corp., Meta Platforms Inc., Tesla Inc. and Nvidia Corp., slipped for the last four trading days, the longest losing streak in a month, according to the Bloomberg Magnificent 7 Price Return Index.
Shares of Apple, down 4.6% in the time period, lead the slump that erased $383 billion in market value. The Nasdaq 100 Index has also fallen in the last four trading days.
This group had risen more than 100% last year, driven by a frenzy in artificial intelligence.
Meanwhile, Apple stock is under particular pressure because of analyst downgrades following expectations of softer demand for iPhones.
Tesla which is also treated as a tech company has also dropped 9%. While it delivered more electric vehicles in the fourth quarter than analysts expected, it has now fallen behind as the world’s largest seller of electric cars to China’s BYD Co.
“In December everyone bought the sizzle,” he said. “Now we have to see if the steak is any good,.” an analyst told Bloomberg.
And In Hong Kong
The Hong Kong government is not selling any residential or commercial land plots in the first quarter of the year, as weak market sentiment dampens developer demand, Bloomberg is reporting.
“In recent months, we have witnessed that the market is not too keen on tendering for residential sites,” an official said on Thursday.
It’s the first time in recent years for the government to not sell any residential plots, according to the official.
The government is also not auctioning commercial sites, continuing the same decision made in the previous quarter, as office vacancies remain high.
The city saw a record 16.4% of empty office space at the end of last year, according to CBRE Group Inc.
The sluggish land market has hurt the government coffers. Land sales have long been a major source of income for the financial hub to maintain a low tax system.
And An AI Key on Microsoft Keyboard
If almost everything can be AI, then why not keyboards too.
Well, remember the Windows button on Microsoft or PC keyboards. Now there will be an AI button as well. The button will activate its AI Copilot service in devices this month.
The Co Pilot key will sit to the right of the space bar and is the first change in the keyboard layout in about 30 years and the Windows or Start key.
Microsoft’s hardware partners will display Windows 11 computers with the Copilot button over the coming days at the CES technology conference at Las Vegas.
In this new year, we will be ushering in a significant shift toward a more personal and intelligent computing future where AI will be seamlessly woven into Windows from the system, to the silicon, to the hardware. This will not only simplify people’s computing experience but also amplify it, making 2024 the year of the AI PC, Yusuf Mehdi, consumer chief marketing officers said in a blog post seen by The Core Report.